This would be through a "three-year Special Drawing Rights loan," Lagarde said in a statement on Wednesday, adding that she expects the deal to go to the IMF executive board for approval in early May.

The IMF, European Commission and European Central Bank agreed with Cyprus on Tuesday the terms of a program that will see the country drastically downsize its bloated banking sector and put state finances in order.

"The Cypriot authorities have put forward an ambitious, multi-year reform program to address the economic challenges they face," Lagarde said, describing it as "resolute".

"The overarching goals are to stabilise the financial system, achieve fiscal sustainability and support the recovery of economic activity to preserve the welfare of the population."